Service to Whom?
to The World Trade Organization's
Agreement on Services
Do you know GATS?
An opinion poll certainly would cause more than 99%
of the citizens consulted to shake their heads and reply: "Never heard
of it." And yet, speaking of GATS, we are dealing with something
that will deeply affect all our lives, much more deeply than what
happens on those levels of political decision making to which our
attention is drawn by the media - unless we manage to implement
alternatives to the "General Agreement on Trade in Services" ("GATS")
which is presently being negotiated within the World Trade Organization
Through the foundation of the WTO in 1995 the principle of the free
movement of goods already proclaimed by the GATT
was supplemented with the liberalization of the trade in services (GATS
agreement) and with the adjustment of the commercially relevant aspects
of intellectual property (TRIPS agreement) GATS
is part of the globalization developments which have been systematically
pushed since the end of World War Two and speeded up dramatically with
the Falling of the Walls in 1989. So it is part of the world-wide
linking-up of the societies and the full establishment of the world
market, with an unheard-of mobility of capital, which has led to the
global competition of the locations.
Former WTO Director-General Renato Ruggiero has said something quite
alarming, namely that the GATS extended the WTO into areas never
previously recognised as coming under the remit of trade policy. "I
suspect that neither governments nor industries have yet appreciated the
full scope of these guarantees or the full value of existing
commitments." Indeed, the agreement's tendency
is to include all activities that have up until now been considered
non-commercial ("non-profit-sector") in the profit-making (i.e.
business) sphere. And this whole sphere is intended to be structured
strictly in accordance with the ideology of neo-liberalism.
Health care and education, the media, child care and elder care - there
is nothing that would not be declared a private-branch of business. The
question of "Cui bono?" is not too difficult to answer: Over the last
few years reference has been made to the so-called sixth Kondratieff-(conjunctural)-cycle,
in which the new mega-trends are set by an increasing demand in the
areas of health, environment and education. If these fields of growth
can be drawn into the sphere of shareholder value economy, there will be
tremendous profits in store for the corporations in the branches of
medicine and biotechnology, but also in the environmental area
(alternative energy, waste disposal etc.).
How far there will be any tolerated exceptions to this principle of any
service being of a private nature is entirely unclear, even though
government representatives reassuringly point to such possible
exceptions. What is clear, however, is that there are to be mechanisms
that will make the observance of the GATS rules enforceable, if need be.
Maude Barlow is right in saying in her article "The Last Frontier"
(published in "The Ecologist" in February 2001)
that with this the end of the very concept of not-for-profit public
services could be near. In the British newspaper "The Observer" of April
15th, 2001 there was an article which quoted from a confidential
document of the WTO secretariat.. According to that document, the
creation of an international agency is planned which is to have the
power of veto against any decisions of single states or governments
concerning environment, health, education etc., should these decisions
constitute a violation of the liberalization of the trade in services
proposed by GATS. This is, says the "Observer", obviously a plan to
abolish the "out-moded political idea of democracy".
In view of such developments large sections of the organized civil
society have woken up. The internet abounds with information on the
dangers of GATS, along with protests about the agreement. Thus an appeal
called "Stop the GATS Attack" has already been signed by 430
Non-Government-Organizations from 53 countries (by June 2001).
Perhaps it will be possible to call forth a broad movement similar to
the one that brought down the international agreement on the protection
of investments, MAI, and the one that led to the failure of the Seattle
Escaping from the vicious circle of wrong
There is wide agreement among "civil society"
that GATS involves a multitude of dangerous regulations hostile to man.
What has to be done now is to enlighten the general public on GATS and
to broaden the front against the agreement.
But at the same time the question arises of civil society's positive
alternatives. If it can be shown how the problems for whose solution
GATS is being praised can be solved in a different way, the movement of
civil society will be greatly empowered.
The strategy of the inspiring forces that stand behind the WTO is to
cause confusion and lead mankind astray by means of pseudo alternatives.
Thus it is suggested that GATS is, so to speak, the logical conclusion
and the only possible consequence of the failure of the attempts to
regulate large areas of social life by way of planned economy and
bureaucratically. Only consequent liberalization and deregulation , they
say, sets people's innovative forces free and finally leads to general
social prosperity. This strategy obviously aims at mentally disarming
the opponents of the present form of globalization, describing them as
the last Mohicans of a quasi stone age bureaucratism, who have slept
away the year 1989. What is public is pretended to be generally
identical with sovereign state-controlled direction and petty-minded
bureaucratic regimentation. At the same time it is insinuated that, as a
rule, non-governmental actors become active in the social context purely
out of commercial interest, their free initiative therefore being
essentially "private" (the Latin word "privare", after all, means "take
by force", i.e. appropriate selfishly). Finally we are made to believe
that there is a choice to be made between the allegedly insurmountable
opposites of liberty (along with economic efficiency), on the one hand,
and solidarity (which is equated with planned-economical inefficiency)
on the other. In this one-sided view, liberty, of course, excludes any
system of health care or education which would be financed consequently
on the basis of solidarity.
It is imperative to confront such ideological stereotyped thought
patterns with unbiased observation and appropriate formation of concepts
in order to be able to outline guiding ideas for the development of
society which make real sense. What counts here are not made-up
"solutions" for all social problems, but the question of social
structures that give people on our globe the chance to solve their
problems by themselves, step by step.
"Public" does not necessarily mean
One stereotyped thought pattern which has to be overcome is the equation
"public = state-run". By no means is this equation any longer obligatory
in our times. There are many civil society organizations which work in a
self-administered and self-determined manner - referred to as "in freier
Trägerschaft (in independent ‘carriership')" - in other words, which are
not state-run, but independently run, but which at the same time assume
public functions and are therefore rightly financed publicly, wholly or
in part. In many areas such organizations are entirely indispensable for
the functioning of the public sector. This applies to certain areas of
care of the elderly, nursing and therapy, social work, curative
education, and drug therapy among others, partly also to the educational
system, where non-commercial free schools play an important part in the
realization of the public task of realizing the human's right to
Indeed, it complies with the spirit of an age of individualization and
pluralization that solutions born of free initiative can take the place
of state-controlled solutions wherever people want this. Between the
pseudo-alternative of "state-run" and "private" there is a third option:
free initiative for the community, financed on the basis of solidarity.
This third way is a way of balance between liberty and solidarity. It
does not lead to "deregulation", but rather to an unbureaucratic
regulation of problems through a variety of task-orientated associations
and self-governing networks which could simultaneously co-operate with
What are services?
About the difference between economy, state activity,
and cultural life, respectively intellectual production
GATS being concerned with services, the question must be raised if the
concept of services, which underlies this agreement, is at all
appropriate. Is there, latently, a certain one-sided conception of man
at the bottom of it, and if so - which?
To provide services means to do something for others - to serve others.
Looked at it in this way, any activity in a social context is a
service. In order to be able to do something for others long term it is
necessary to have an income that makes this possible. Income in the form
of money, in this context, means being entitled to use and consume a
certain part of the economic values created. In this respect everything
anyone does for someone else in our modern society necessarily has an
economic aspect. Does this mean, however, that every activity is an
essentially commercially directed economic activity per se? For this is
what the logic of GATS implies!
Economy is primarily the production of goods, ultimately induced by the
pull of the consumers' needs. Goods are material things, such as food,
clothing, housing, means of transport, which are bought and sold. In
order for them to reach the consumer, services are required that are not
material things in themselves, but do call forth material results and
are indispensable for the material goods to reach their destinations.
Here we find the work of the haulage contractor as well as that of the
bank clerk, the wholesaler and retailer, or the telephone company over
whose lines business appointments are made. These kinds of services are
directly marketable, i.e. saleable and purchasable.
It is somewhat different with the services rendered by the "civil
servants" (officials), parliamentarians etc. They do, indeed, need an
income, but they are neither indirectly nor directly involved in the
production of marketable material commodities. They receive their part
of society's wealth by way of tax revenues. It would make little sense
to pay a top government official according to the number of rules
"produced". What matters in government and state is something
qualitatively different from economic goods; what matters is that
everyone, as a peer, receives that which is his inalienable right. Thus
this area ensures (at least this has been its ideal so far) a certain
social infra-structure and social harmony, which is also vital for the
economy. But the state is only capable of doing this if its citizens -
through democratic consensus - are in a position to set certain limits
to the economy by law, regulatory frameworks, with which enterprises
have to comply.
We have to recognize that there are essentially different kinds of
services, which cannot necessarily be equated with each other. With a
building contractor, for instance, we sign a contract for work and
labour, which connects the payment with the result, e.g. the finished
house; with a lawyer - at least in central Europe - we conclude a
service contract, which provides payment irrespective of the result of
In addition, all cultural work, all intellectual production, in as far
as it does not have a purely private leisure-time character, can only be
achieved if it is financially supported. Teachers, doctors, and
university lecturers need an income in order to be able to devote
themselves to their profession. In this respect their work becomes
directly comparable with that of any other occupational category. But
they do not produce any material goods or any accomplishments connected
with material production, either. What teachers help to develop in their
students in the way of key qualifications will no doubt become
economically highly relevant in the future; for the present, however,
this relevance rests completely on the "principle of hope". It is
absurd, in fact contemptuous, to say that pupils are "products". The
teacher does not produce economic goods, but assists in the development
of the individual child by the manner in which he faces him. His work is
not a standardizable performance, but a subtle "relational service",
which requires a space of creativity where it must be possible to
individualize. Similar questions arise when we consider the relationship
between doctor and patient, between geriatric nurse or curative
educators and those cared for.
The activities mentioned need a form of financing that creates the free
space necessary for them. Only when an understanding of the importance
of the cultural sphere prevails in our society will there be the
readiness to place that part of the economic values created at its
disposal which this sphere needs for its development. Wherever education
is viewed only from the angle of economics, the readiness to ensure the
right of being educated to every young person, irrespective of his
parents' purse, will eventually disappear. Something similar holds for
the health system.
Marianne Hochuli has put it in a nutshell: "Sectors like education and
health should under no circumstances be subject to the same rules as the
trade with manufactured goods."
The puppet in the puppet: The concept of
man in the GATS ideology
The ideology which is behind GATS obviously leads to an intellectual
blindness to the particular nature of culture and law as opposed to the
economy, absorbing, however, also certain aspects of economy itself,
while distorting others or making them appear oversized.
The neo-liberalism of the WTO ideologists knows and acknowledges only
selfish private interest as the motor of all economic enterprise. In the
neo-liberal ideology, the contradiction between this "self-interest" and
the fact that labour for others is necessary in our labour-dividing
economy, can only be resolved by combining pecuniary incentives with
unlimited competition. For only through this competition - in their way
of thinking - will the opposing egotistical motives wear each other
down, and only the whip of competition is believed to lead to permanent
innovation and hence to an increase in productivity and a cheapening of
the products, so that finally - without the economic actors' will and
intention - a social redistribution takes place behind their back. In a
recent publication the underlying principle is described as the "Mephisto-principle".
To its supporters, any attempts to infuse the economy with social and
ecological reason, through processes of agreement among the partners
involved - in production, distribution and consumption - are suspected
of cartelizing and are therefore to be prevented by strict application
of the competition law. This gives the competition law priority over the
law of contract, which surely - as an aspect of the general freedom of
action of the individual - is an inviolable human right.
The underlying view is determined by distrust of the developmental
possibilities of man. Its credo reads: Human beings can't help being as
they are. Man's selfish side - undoubtedly existent - is simply blown up
to equate with the whole of man's nature. The fact that responsibility
and social qualities develop only through taking part in social
processes is faded out systematically in this context. This distrust
also explains the seeming inconsistency of the advocates' of elite
globalization insisting on apparently limitless freedom in the economic
sphere while opposing both an extension of the principle of democracy
and a consistent autonomous self-government of a free cultural life.
Neo-liberalism does harmonise well with a "Singaporization" of large
parts of the globe, that is with authoritarian structures.
Economy - servant of society or its
The economic sector, thus conceived, is preparing - through GATS - to
make itself irrevocably the master of society.. More precisely: Money
reigns over the economy, and the economy ruled by money is supposed to
rule society. To this economy, for which the principle of universal
saleability does not stop at the goods, but which extends it also to the
factors of production (land, labour, capital), human beings are
necessarily cost factors so long as they cause wage costs or social
costs. The economy, therefore, tends to become anti-human and presumes
to derive law from its feigned inherent necessities instead of yielding
to the law, by which the societies set limits to it.
The state used to raise taxes and social revenues to be able to finance
public services - social systems, culture, but also the actual state
activity itself. Today the economy is evading its grip by putting
pressure on the states in the course of the competition of the locations
with the aim of re-adjusting the social costs and taxes to a lower
level. Eighty percent of the people will be dispensable to the economy
in the future anyway and will at best receive what a former American
safety advisor has called "Tittytainment" - a combination of covering
basic living costs at a relatively low level and cheap entertainment.
Resistance is essential, if this is not to be tomorrow's reality.
Right is what is advantageous to the
Global Players …
The critics of GATS are therefore justified in emphasising that the
creative authority of the democratic states, that means the
law-developing power of the citizens, which is perforated through
globalization, anyway, will be even further reduced by the agreement. At
the same time, so the critics, the principle of subsidiarity, whose
supposed purpose is to permit the problems to be handled as close to the
basis as possible, will be thus undermined.
An investment, according to the logic of GATS, is a service rendered -
in fact, not only a real-economic investment, but also one at the
financial markets. Thus any independent legal regulation, which, for
instance, provides control of the financial markets, can be unhinged.
What if people advocated a certain level of environmental protection and
social security? The answer would be: This is an offence against the
freedom of the trade in services! - What about imposing regulations on
foreign-based investors? This would be an offence against the freedom of
trade! - What about the state supporting and financing institutions
which are independently run, work community-orientated and do not accept
commercial principles as the basis of their management? Again: Offence
against the freedom of trade! - What if economic partners in a global
chain of economic value added in a certain branch stipulate measures to
safeguard fair prices? This would be a violation of the freedom of
competition! - What about people claiming their freedom of action and of
contract making? Well yes, but only if there is no impingement on
competitive freedom! - And what about promotion of local businesses or
publicly set ecological and social standards in the case of orders
placed by public institutions? This would be a violation of the
worldwide obligation of open prize competition!
Particularly affected by such regulations are poorer countries. Some
governments of these countries rightly demand a "protective clause in
the GATS permitting steps to be taken whenever a country is flooded with
services activities that threaten the existing domestic
Is acting out of discernment impossible?
- The campaign against autonomous man
The attack launched by GATS goes even beyond this, however: In the
Universal Rights of Man the dignity of the individual is centrally
placed and under the protection of the global legal system. Dignity of
man, in its quintessence, is the possibility of the individual to make
use of his own thinking without any direction from outside and to act
out of his own insights. This fact substantiates individual rights of
freedom, on the one hand, and - on the other hand - democratic rights
of participation wherever rules for larger communities of people sharing
a common territory are concerned. Ensuing from this fact are, at the
same time, social rights of man, without which freedom would exist on
paper only and social protection would at best be an act of grace
dependent on the cash balance of the state.
The mode of thought on which GATS is based offends this concept of human
dignity in its very essence. This frequently happens in a disguised
form, though, so that you have to look very closely to notice it. If
everything is economy - and if economy is promoted only by man's
self-interest - then there is basically no practice that flows out of
free insight, out of love of the aim of the action or, respectively, for
the person opposite to whom the action is directed - in no case,
however, a practice relevant for the social sphere. There are only
calculating and selfish actions. For this reason man's capacity to act
must be squeezed into a system. Such a system is the set of rules of
competition, supplemented with the control of a state totally orientated
to the economy. The governmental activity itself is thereby supposed to
undergo a transformation, which is already underway everywhere under the
slogan of New Public Management. This transformation consists in the
fact that the governments, in the first place, are meant to align their
own activities to the criteria of market economy and, in the second
place, to enforce the commercial alignment of cultural life - if need be
by creating artificial market-like conditions in education, social
therapy, kindergartens, the public health sector etc.
At first sight competition between services providers seems to
safeguard the autonomy of the cultural sector at the same time: anyone
may offer now whatever he likes. In reality, though,
"solidarity-financing" of culture as a component of the public sector is
weakened without any achievement other than that "partial autonomy"
which, particularly in education is being invoked as a slogan everywhere
in these times of the New Public Management. Partial autonomy means:
Apart from ensuring freedom of trade the state also sees to the securing
of an adequate "output" of the cultural institutions, the catchwords
being: performance orders, comparability and cost-cutting through
standardization and establishment of "competition-like" conditions,
implementation of quality assurance systems and, at the same time,
downward delegation of detail responsibility. As far as public financing
still takes place at all, it is coupled with the fulfilment of
What does it mean to class the activity of a teacher, a doctor, a
researcher in the realm of economics? It means that a certain way of
thinking appears which in the long run cannot but change the quality of
the activity of the teaching, the researching, etc. Research becomes
liable to economically utilizable results, also fundamental research
basically becomes applied research. Liability, warranty and consumer
protection become relevant categories for the tuition. There is a
dimming of the understanding of culture as an antipole of the economy,
as a sphere of inner growth as opposed to outer growth, of meaning as
opposed to gratifying the outer needs, etc. Where everything is buyable,
inevitably also the spirit is for sale. That the other central WTO
agreement, TRIPS, ensures the saleability of intellectual property,
including the utilization of plant species and the patenting of life, is
founded on the same fatal logic.
for action and alternatives
Regaining the democratic states' capacity to act
What can be done to restore the legal communities' capacity to act?
Certainly: First of all, the crudest assaults against democracy must be
parried , GATS and the foundation of the practically uncontrollable
agency for the monitoring of its observance must be prevented. But this
will not suffice. The powerlessness of the legal community, of the
democratic state has its root in the possibility of the Global Players
to evade any territorial regulation by simply transferring job sites or
to enforce social curtailments using the argument of competitiveness. At
the same time there is a worldwide increase of unemployment through the
very development of increasing labour productivity, and this means that
more and more people can no longer earn their income through gainful
employment and are dependent on "social income". How can the exclusion
of these people be avoided? Moreover, how can the poorer countries be
enabled to build up their own social security systems?
At present the financing of the public sector is mostly attached to the
working income in the form of incidental labour costs or income tax.
This results in the social welfare expenditure of the rich countries
being exported to the south by way of prices and goes hand in hand with
a kind of social dumping through imports (from the south). The countries
of the south cannot build up any social systems without jeopardising
their competitive advantage of low labour costs, while, at the same
time, the social systems of the north are coming under considerable
pressure. If there was world-wide acceptance of the principle that the
financing of the public sector is achieved through taxing the
consumption, we would have a different situation, as consumption is
location-bound. The "legal communities" (i.e. states) would be able
again to guarantee a legally intended protective social level without
its discriminating against the respective home industry in their
competition. In future it would be much more difficult for legal
conditions for industry and business to be thwarted by economic
For a structural change of the public
What matters is to defend the public sector as a sphere of non-profit
services! But don't let us blunder into the trap - let us not be made to
defend the status quo! In fact, in the past there has been too much
petty regulation by the state. The alternative to this, however, is not
GATS, but a structural change in the public sector corresponding to the
inner impulse of civil-society's commitment. The principle of civil
society is the struggle against conformism of any kind, it is diversity
and individuality. For the public sector this would necessarily mean:
moving away from the traditional sovereignty and prerogative of the
state, and moving towards systems of education and health that are
funded "in solidarity", but at the same time also stamped by being
independently run, by diversity, and, therewith, by the respective
direction of the volition of the receivers of their benefits. Let us put
a real partnership between institutions and enterprises which are
self-determined and at the same time obligated to the common interest,
on the one side, and the state-run institutions, on the other, in the
place of distorted forms of Private Public Partnership.
We do not need performance orders given by a government to cultural
institutions dependent on directions and forced into an artificial
ruinous competition, given by a government which on its part is a an
order receiving lackey of an economy soaked with neo-liberalistic
ideology, which defines the "output" expected of the cultural
institutions. What is promising is, rather, solutions where free
institutions, in a self-obliging manner, take over public functions as
independent responsible bodies and enter into contractual relationships
with government partners on eye to eye level.
And as for the government itself, what matters here is a transformation
towards more basic-democratic participation, including the right of
citizens' initiative, popular demand and plebiscite.
Giving a chance to new forms of social
The GATS ideologists obviously want us to forget that there have always
been - and still are - attempts to counter the liberal and neo-liberal
economy with an economic system that is polity-orientated and socially
responsible without being planned-economic: The business enterprises of
the Labour movement, Ernst Abbe's foundation idea, Gottlieb Duttweiler's
idea of social capital, the concept of the Grameen Bank, the initial
stages of similar ideas in the Prague Spring, and the movements of
upheaval of 1989 towards a Third Way should be mentioned here; not to
forget either the manifold attempts at cooperating and fair trading from
production to consumption, nor new forms of handling money, land and
capital, nor initiatives for a new agriculture.
Even though many of these approaches failed at first or presently only
have a limited radius of operation - to call them to mind is enough to
refute the thesis that an economic system which is based on maximum
profit of the capital owners is the epitome of economy. Civil society
has no reason to be "anti-business”, but it does have every reason to
support new approaches of doing business in an ecological and social
manner which might also be capable of forming associations to balance
regional and global interests on a basis of mutual trust and
Only such an economic system where services are not a vehicle of profit
making, but where cost-effectiveness and profit are a means to fulfil
social and ecological tasks, can be called humane.
From GATS to "GAFT"?
Let us develop a broad global movement against GATS! Within this
movement and at the round tables of trisectoral partnerships, let us
develop, at the same time, a dialogue on civil society's visions of a
social future stamped by structures that enable people to solve their
social problems more and more fruitfully and to put into practice ever
more freedom, justice and solidarity.
This GATS - we don't need it. What we do need at best is an agreement
which does not yet exist and which we might call "General Agreement on
Fairness in Trade" ("GAFT"). This would be an agreement which creates
global basic conditions for the gradual development of a global
economic life, which is only shaped by the agreements of the partners
concerned and which is efficient and structurally and regionally
well-balanced - in a word, a socially responsible economy, which is
based on the equalization of interests and aims at setting fair prices.
November 2001. Translation by Wilfried Hüfler.
© Christoph Strawe
Links to Other Texts of Christoph Strawe:
Threefolding or Global Governance?
to the Public Hearing on the Charter of Fundamental Rights of the European Union on the 27th of April 2000 in Brussels
Proposals of Initiative Network Threefolding for the Charter
of Fundamental Rights of the European Union (Christoph
Strawe // Gerald Häfner // Robert
Rights in Europe
and Global Civil Society
Initiative Network Threefolding and Institute for Contemporary Social
Project "EU 21 – Constitution from below"